Free Washington D.C. Real Estate Practice Exam

Q1.Under the D.C. Real Estate Licensure Act of 1982, which of the following individuals is EXEMPT from obtaining a Washington DC real estate license?

• A.A property manager who negotiates leases on behalf of multiple landlords for compensation
• B.An attorney who sells real estate on behalf of a client as part of their legal duties
• C.A salaried employee of a real estate brokerage who shows properties to prospective tenants
• D.A person who lists and markets residential properties for sale on behalf of others for a fee

Q2.Under the Truth-in-Lending Act (TILA) and Regulation Z, which of the following triggers full disclosure requirements when advertised for a home loan?

• A.Mentioning the property's square footage and neighborhood amenities.
• B.Stating that financing is available with 'low monthly payments.'
• C.Advertising a specific annual percentage rate (APR).
• D.Including the lender's name and contact information in the advertisement.

Q3.The most important thing a listing agent can ask a buyer's agent when reviewing a financed offer is:

• A.Whether the buyer has a pre-qualification, pre-approval, or loan commitment — and from what type of lender
• B.Whether the buyer has made offers before
• C.Whether the buyer's agent will reduce their commission
• D.Whether the buyer will waive the inspection contingency

Q4.A lender refuses to provide mortgage loans to applicants in a specific zip code that is predominantly composed of minority residents, regardless of the applicants' creditworthiness. This practice is known as:

• A.Steering
• B.Blockbusting
• C.Redlining
• D.Panic selling

Q5.A buyer files a HUD complaint alleging a licensee refused to show homes in certain neighborhoods. HUD investigates and finds reasonable cause. What happens next if both parties don't elect federal court?

• A.The complaint is dismissed
• B.The case proceeds before a HUD Administrative Law Judge, who may award damages, civil penalties up to ~$24K (first offense), and injunctive relief
• C.The case is automatically referred to a criminal prosecutor
• D.Only state-court remedies remain

Q6.A brokerage wants to demonstrate the Faragher-Ellerth / reasonable-care defense to a vicarious liability claim. What must it prove?

• A.That it had a written policy posted in the office
• B.That the discriminating agent acted alone
• C.That no prior complaints were filed
• D.(1) It exercised reasonable care to prevent and correct discriminatory conduct (written policy, training, multiple reporting channels, prompt investigation, documented discipline) AND (2) the complainant unreasonably failed to use the available remedies

Q7.A DC-licensed real estate salesperson is working with a buyer who asks whether the salesperson represents the seller, the buyer, or both. Under DC law, when must a real estate licensee disclose the nature of the brokerage relationship to the buyer?

• A.Only at settlement, when all parties sign the HUD-1 or closing disclosure
• B.At the time the first substantive contact is made with the buyer, before any confidential information is exchanged
• C.Only after the buyer has signed an exclusive buyer representation agreement
• D.Only if the buyer requests a written explanation of agency relationships

Q8.Under the Equal Credit Opportunity Act (ECOA, 15 U.S.C. § 1691 et seq.) and Regulation B, a DC mortgage broker affiliated with a real estate brokerage collects a buyer's loan application. The buyer is a married woman, and the mortgage broker asks her to have her husband co-sign the application even though her income alone qualifies for the loan. The real estate broker, aware of this practice, does nothing. Which of the following MOST accurately describes the legal consequences?

• A.The mortgage broker's conduct is permissible because lenders may always require a co-signer to reduce default risk, and the real estate broker has no duty to intervene in lending decisions.
• B.The mortgage broker has violated ECOA by requiring a co-signer based on marital status when the applicant independently qualifies; the real estate broker may face ECOA liability for knowingly facilitating or referring business to a lender engaged in discriminatory practices, and the buyer is entitled to a written notice of the specific reasons for any adverse action.
• C.Only the creditor (lender) can violate ECOA; the real estate broker has no ECOA exposure because brokers are not creditors under Regulation B.
• D.The conduct violates the Fair Housing Act but not ECOA, because ECOA applies only to race and national origin discrimination in credit transactions.

Q9.Under CERCLA (the Comprehensive Environmental Response, Compensation, and Liability Act), which of the following parties can be held liable for the cleanup of a contaminated property?

• A.Only the party that originally deposited the hazardous substances on the property
• B.Only the current owner if they purchased the property after contamination occurred
• C.Current owners, past owners, operators, and parties who arranged for disposal of hazardous substances, subject to certain defenses
• D.Only government entities that operated the site as a waste facility

Q10.What is the key difference between a mortgage pre-qualification and a mortgage pre-approval?

• A.Pre-qualification involves a hard credit pull; pre-approval uses only a soft inquiry
• B.Pre-qualification guarantees the loan amount; pre-approval is only an estimate
• C.Pre-qualification is required by Arizona law; pre-approval is optional
• D.Pre-qualification is an informal estimate based on self-reported data; pre-approval involves verified income, assets, and credit

Q11.Real estate property taxes for the year have not yet been paid at the time of closing on October 1. The taxes are $3,600 for the full year. Using the 360-day method (30-day months), what is the seller's prorated share of property taxes?

• A.$2,400
• B.$2,700
• C.$900
• D.$3,000

Q12.RESPA requires lenders to provide the Loan Estimate form to borrowers within how many business days of receiving a completed loan application?

• A.1 business day
• B.3 business days
• C.5 business days
• D.7 business days

Q13.According to EPA guidelines, which action regarding underground storage tanks (USTs) is required for real estate professionals when representing clients in commercial property transactions?

• A.Advising clients to investigate potential environmental liabilities associated with USTs
• B.Conducting soil contamination testing on all properties with current or former USTs
• C.Obtaining EPA permits for any existing USTs on the property
• D.Removing all USTs before completing the transaction

Q14.A seller's agent presents a written offer to the seller. The seller makes several handwritten modifications to the offer, initials each change, and signs the document. The buyer's agent delivers the modified document to the buyer, but before the buyer can respond, the seller calls and verbally withdraws all modifications, stating the original offer terms are acceptable. At what precise moment was a binding contract formed, if at all?

• A.When the seller signed and initialed the modifications, because the seller's signature constitutes acceptance
• B.No contract has been formed yet, because the seller's modifications constituted a counteroffer that was then withdrawn before the buyer communicated acceptance
• C.When the buyer's agent received the modified document, because an agent's receipt equals the principal's receipt under agency law
• D.When the seller verbally withdrew the modifications and reverted to the original offer terms, binding both parties to those terms

Q15.Under DC Real Estate Commission rules, what is a supervising broker's primary obligation with respect to affiliated salespersons working in their office?

• A.The broker must co-sign every purchase contract negotiated by an affiliated salesperson
• B.The broker must ensure that affiliated salespersons hold an active DC broker license
• C.The broker is responsible for the direct supervision, training, and conduct of affiliated licensees operating under their license
• D.The broker must accompany affiliated salespersons on all property showings